Canada’s Conservative government introduced a long-awaited bill to update the Copyright Act and bring it in line with modern technology yesterday.

Bill C-32 follows two previously failed attempts to introduce reforms to the Copyright Act, and months of public consultations held online and in town hall meetings across the country over last summer. The Feds depicted the bill as a balanced approach that equally considers copyright holders’ and consumers’ rights — but critics tell a different story.

The Bill protects copyright holders rights above others by making it illegal to pick a digital lock. Similar to the U.S. Digital Millennium Copyright Act (DMCA), the Bill would ban software or services that can break digital locks, with only a couple of specific exceptions.

“If somebody creates a product and they decide to have a lock on it to protect it, that’s their choice,” James Moore, Minister of Heritage said at a press conference. “We’re putting measures in place for protection of creators, and it is their decision whether they use them or not.”

Digital locks are important for businesses and many content creator groups supported having them during the copyright consultations, he adds. Canada also must address digital locks in to honour the World Intellectual Property Organization (WIPO) treaty it signed in 1996.

But those treaties can still be met with some more flexible options other than digital locks, says Michael Geist, Canada Research Chair in Internet and E-commerce Law. The current Bill favours copyright holders too strongly.

“Anytime a digital lock is used – whether on books, movies, music, or electronic devices – the lock trumps virtually all other rights,” he writes in his blog. “In other words, in the battle between two sets of property rights – those of the intellectual property rights’ holder and those of the consumer, who has purchased the tangible or intangible property – the IP rights holder always wins.”

The Bill has some tough measures for those who would break digital locks – referred to as “technological protection measures” – in order to profit. A conviction could mean a $1 million fine and five years in jail for the offender.

Such measures are meant to protect Canada’s burgeoning digital industries, the ministers stated at yesterday’s press conference. These industries are already generating billions in revenue annually and are expected to grow significantly.

“It would make it impossible for the gaming industry to survive were there no digital locks that could avoid being hacked,” Tony Clement, minister of industry said at a press conference. “It’s not our decision to make, that’s a conversation between the consumer and the creator.”

Content creators should be the ones to decide how their property is distributed, says Danielle Parr, executive director of the Entertainment Software Association of Canada. Digital locks supports several different business models — including offering free demos, and then a paid full version of a game, for example.

“Our business is the sale of intellectual property,” she says. “Being able to protect that IP in the way we see fit is essential.”

It’s a good idea to use digital locks that stop people from stealing video games, agrees Charlie Angus, the NDP’s copyright critic. But using digital locks isn’t such a good idea when they prevent format shifting – such as copying a movie from a DVD to an iPod or computer.

“This is where the government continues to miss the mark,” he says. “To say that a digital lock is the only measure isn’t a good idea.”

But Parr says exceptions to the protection of digital locks won’t work.

“When you create a big hole in the law that people can drive through, the onus is suddenly placed right on the copyright creator to prove the infringement,” she says.

The bill’s outlawing of digital lock picking will be a hard one to enforce, says David Allsebrook, an intellectual property lawyer at Toronto-based Ludlow Law. Many tools for circumvention are currently sold at retail stores, or are freely available for download over the Internet.

“You’re going to criminalize it or make it a civil offense to do something that everyone is going to do,” he says. “It’s just another example of how every amendment of the Copyright Act takes away from the original purpose of the act to strike a balance between the copyright owner and the consumer.”

The NDP will vote to pass the bill on first reading despite misgivings, Angus says. The bill has some positive provisions and is worth taking to committee for further discussion and reworking.

Bill C-32 contains a number of new fair dealing provisions. It clarifies that format shifting (such as moving music from a CD to an iPod) is legal, and time-shifting of TV programs using recording devices is also fine. Comedians can use copyrighted works for works of parody or satire, and not fear being slapped with a lawsuit.

Internet providers will also not be held responsible for content users are downloading. Internet users will also have their privacy protected from copyright holders, and only receive a warning if they are accused of infringing copyright instead of having their Internet connection cut off.

“We disagreed with having a notice and takedown, which is a centerpiece of the DMCA in the U.S.” Moore says. “We’ve stuck with notice-and-notice in Canada.”

There’s been suggestion that Parliament could sit through the summer to debate the bill. The Conservatives see passage of the bill as essential after years of other failed copyright act amendments.

“Everybody agrees the status quo is not acceptable except for pirates,” Clement says.

Angus was less enthused about debating the bill over the summer, saying it wouldn’t receive the same amount of public scrutiny.